Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
1. Suppose that Citigroup (C) has an expected return of 14%, while McDonald's (MCD) has an expected return of 8%. Find the expected return of a portfolio consisting of 75% C and 25% MCD. Show work and do not round. 2. This graph shows the annual returns for stocks A, B, and C over a seven year time period. Separately, the three stocks have about the same expected returns and standard deviations. a. Are stocks A and B positively correlated, negatively correlated, or not correlated? Explain. b. If your portfolio currently consists only of Stock A, would the addition of stock B cause risk reduction? Explain, using the appropriate terminology. c. Are stocks A and C positively correlated, negatively correlated, or not correlated? Explain. d. If your portfolio currently consists only of Stock A, would the addition of stock C cause risk reduction? Explain, using the appropriate terminology. 3. Interpret the betas shown by determining what we expect to happen to the stocks given the described market movement. Note that the last column is asking about a loss. Express your answer as a positive whole percent along with the word "gain" or "loss." (Example: 5% gain). Stock (Symbol) Beta Expected return if market gains 10% Expected return if market loses 5% General Mills (GIS) 0.20 Overstock (OSTK) 2.60 Emergent Bio-solutions (EBS) -0.40 4. Using the betas given above, find the beta of a portfolio consisting of 50% GIS stock, 30% OSTK stock, and 20% EBS stock. Show work. 5. You are going to hold a stock for one year. Over the year, you expect the overall market to return 12%, and you expect the yield on the 3-month treasury bill to be 2%. Use the CAPM equationto answer the following questions. a. The beta of United Parcel Service (UPS) is about 0.8. What must you require regarding the return on United Parcel Service in order to justify the risk of owning it over the next year? Give a numerical answer and show work. b. The beta of Apple (AAPL) is about 1.5. What must you require regarding the return on Apple in order to justify the risk of owning it over the next year? Give a numerical answer and show work. c. Suppose that you expect to earn an internal rate of return of 15% on AAPL stock. According to the guidelines in the text, would this be an acceptable investment? Explain. 6. An investor has the following portfolios available: Portfolio X, with expected return 8% and standard deviation 9% Portfolio Y, with expected return 8% and standard deviation 12% Portfolio Z, with expected return 10% and standard deviation 12% a. We can say for sure that Portfolio X is superior (efficient) compared to Portfolio Y. Explain how we know. b. Can we make the same sort of definite choice between Portfolio Y and Portfolio Z? Explain. c. Can we make the same sort of definite choice between Portfolio X and Portfolio Z? Explain.
Suppose a freeze in florida wipes out 20% of the orange crop. How will this affect the equilibrium price and quantity of banana? Assume that the orange and banana are substitute to each other.
Throughout this course we have discussed the 'agency problem' - i.e., when the interests of owners and managers are not properly aligned.
Rank the bonds in terms of convexity, and express the convexity relationship between zeros and coupon bonds in terms of maturity and duration equivalencies.
Assume that demand for oranges is given by the following Equations, with quantity measured in oranges a day and price measured in dollars per orange.
New England Co., predicts that it will use 360,000 gallons of material during the year. The material is expected to cost $5 per gallon. It anticipates that it will cost $72 to place each order. The annual carrying cost is $4 per gallon.
Suppose that in 1984 the total output in a single-good economy was 10,000 buckets of chicken and the price of each bucket of chicken was $10. In 2005 the price per bucket of chicken was $20 and 22,000 buckets were produced.
What impact would a change that shifts an economy's production possibilies curve outward have on the long run aggregate supply curve How have imporvements in computer technology affected production possibilities and the long run aggregate supply c..
Write the expression for the demand curve, i.e., P = f(Q). What kind of expression is this?
Compare and contrast the behaviour of the indicators for the United States with those for the Australian economy and which industry experienced the highest rate of growth in the twelve months March quarter 2013 - March quarter 2014?
a. Aprroximately what percentage of the company's accounts receivable have balances below $30 b. Approximately how many of the 10000 accounts have balances excedding $98 Account Balance Frequency $ 0 to under 50 10 50 to under 100 15 100 to under 150..
What is quality-adjusted life year How can it be used to compare differences in health status between someone who is healthy and someone who is not Ca it be used to compare health outcomes of someone who is ill with someone who has died
The government of Dreamland is determined to deal with the smelly externality associated with the production, sale and enjoyment of puppies. If the government imposes a $50 tax per puppy on the producers of puppies, what is the affect of the tax o..
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd